Being so amazed with the inifinite uses of vinegar :) I tried to use it to clean all my towels.
They didn't absorb water anymore and they where only good for one use only after they were washed.
I put 2 tablespoons of vinegar to the rinse cycle of the washing machine (you can put up to a cup - but beware of the smell).
After one complete cycle, I ran another one (just the rinse cycle) just to be sure :) and I put another 2-3 tablespoons of vinegar.
I am now happy again with my towels - they absorb water again, dry quickly and don't smell anymore.

A word of caution!
One night I was tired and forgot to dilute the vinegar with water. I soaked the cotton ball directly in the vinegar and used it to wash my face.
I couldn't breathe and my tears began to flow. I realized what I've done and washed my face quickly with cold water.
Don't use vinegar directly and always dilute it with water.